Factors to Consider Before Going into Business:
Traditionally, people have the option of either working in a paid employment or go into business. Paid employment can be in either the private or public sectors. Any career option that one takes is quite as good as the other. What is important is that there should be congruence between your interests and abilities.
A lot of people are fascinated by and want to go into business. Indeed, like several other undertakings in life, there can be excitement, fun and reward in business. But there can also be a lot of hard work and heartache. Business like some other endeavours is not for the fainthearted.
For the purpose of this write-up, I am assuming that you are considering going into business. There are several possible reasons why people start considering going into business. Some are not able to get a paid employment, others are already employed but are bitten by the entrepreneurial bug; yet others have either lost their paid jobs, or will have to soon retire. No matter your situation, I want you to consider a number of issues seriously so that you can enhance your chances of success. These are obviously and by no means the only issues to consider. Your situation and circumstances can bring additional specific factors into consideration.
What is your motivation? The type and level of motivation an individual has is one of the most important factors that leads to success or failure in any undertaking. I suggest that you search yourself to ensure that you are not considering going into business on a ‘me too’ sort of consideration. You should sincerely assess yourself vis-à-vis the demands of the business you want to go into and be sure it is something you want to do. Lasting success in business will come, like in other endeavours, from going into it for the right reasons. The ‘right’ reasons will differ from one individual to another. What is important is that you must be very clear about what you want to achieve by going into business.
Obviously, you will want to give yourself and your family whatever good life you can afford. But research has shown that above and beyond that, the people who succeed the most in business and enjoy the success are those who are in it for higher goals. What these higher goals might be differs from one individual to another. Find your own.
What is your present circumstances? Your age, educational background, marital status, financial and family circumstances etc. are some factors that can initially determine what you can start with. Please note the word ‘initially’. Subsequently as you develop yourself you can consider going into other businesses that you could not have earlier. Similarly, the level of moral and financial support you get at the beginning of your venture will also influence what you can start with and what you cant. That is not to say that these are necessary conditions. But they go a long way in making things a little easier for you.
You have to understand that your decisions will not only affect you, but those close and distant to you. So you owe a lot more responsibility than you can initially imagine. Be thorough in your thinking.
What is your risk profile? Different endeavours require different risk inclinations. Some of us will find it easy and exciting to be astronauts whilst some of us will have a sleepless night when they have a one hour terrestrial flight to take the following morning. We must understand the kind and quantum of risks we are willing to take in life and start from there. Do not take more risks than you can emotionally and financially bear. Otherwise you will be pre-occupied with the thought of the consequences than facing the job ahead of you. It has actually been proven that people will more likely fall into a pothole when they are more preoccupied with it than with the rest of the road that is entirely safe. As your skills in business increase, you will learn to assess and take on ‘more’ risks than you could have earlier. This comes with time, understanding ad experience.
What business do you want to do? You have to be very careful in selecting the business you want to go into. You must consider yourself as enumerated above as well as what are the commercially viable opportunities available. Identify what your areas of strengths are, consider your areas of interest and where commercial opportunities are available. Where these three factors intersect will likely yield the highest chance of success for you.
In some previous articles, we have discussed how to assess your preparedness for entrepreneurship as well as how to asses the feasibility of a business idea you are considering. I suggest you read those and take the relevant tests as well.
Get a partner: Empirically, we have not demonstrated so much success in developing partnership models here. Whilst this is a topic that needs a study on its own, it is important to state that we still have quite a number of cases where partnerships have worked brilliantly. I have some friends who ran an Accounting firm. For me, they are a model of how partnerships can and do work even in our environment. One of the partners is fully responsible for all the day-to-day running of the firm whilst the other focuses on business development. The essence of partnership is to complement and support each other. In the beginning and at difficult times, which will certainly come, you will need these two factors.
Search amongst friends, colleagues, acquaintances or from introductions and see if you can get a partner. But this is not something to rush into. The two (or more of you), must spend enough time to understand each other’s strengths and weaknesses. You must clearly agree on ownership issues as well as define areas of responsibilities. Equally very importantly, you must spell out an exit agreement.
Sometimes obviously, you are unable to get the right partner or you simply want to start on your own for reasons that should be clear to you. In any case, your best will be demanded and you should be ready to put it in.
Get a mentor: You should get a senior and appropriately experienced person who ‘has been there and done that’ to serve as your mentor. He will serve as a guide to you and that will go a long way in helping you to succeed. Your mentor should ordinarily not be anyone who has any financial interest in your business. It is also good that you do not seek such support from him/her. It should be a strictly business advisory relationship. You just need someone who has your interest at heart. You will regularly meet with him/her to discuss your plans, your challenges and success.
Your mentor is like your doctor, and you must be open and sincere with him always. You must be able to express your excitements as well as your fears, and apprehensions. That is the only way he can guide you.
Think big but start small: Most of us want to start business in a ‘big way’. Some businesses are obviously ‘big’ by nature and must be started that way. There are businessmen and women who can start that. For now you are not among them! Several other businesses however, could be started reasonably small. Once you can handle the small business, it becomes easier for you to grow and handle the growth equally well. The urge to start big is usually with people, like me, who have worked with large organisations. But it is important to realise that working and managing a large organisation is entirely a different kettle of fish to owning and running even a small organisation. Even if you have the resources to start in a big way, Start small, learn the ropes and then grow.
When do you start? It may seem counterintuitive, and I did not understand it earlier either. But one of the best times to start a business is during a recession! And really the reasons are not far fetched. During a recession, you will get most assets you require for your start up at rock-bottom prices and even more importantly, you will be forced to start lean and claw your way up. Starting during difficult business times will force you to think creatively on all issues. You will also develop requisite business discipline that will help you very much when the good times return.
Definitely, sometimes opportunities open up for us to start our business during the good times. We should seize the opportunities and make the best of it. However, we should not be oblivious of the fact that difficult times will also come. You should therefore make maximum use of the opportunities that you have to grow and build assets; be disciplined in the use of your resources; and be alert to slightest signs of the difficult times that will come. Your mentor will help you detect the early warning signals. Listen to him.
Continuously develop yourself: Running a business is like running an endless marathon. There will always come challenges, opportunities, new goals, etc. The local and global economies will bring up opportunities. New technologies will create disruptions in the way businesses are traditionally done. You must therefore be alert and always prepare yourself for both anticipated and unexpected changes. Consequently, a few things must be part of your regular routine: continuously self-development (and the development of your team) as well as regular physical exercises. Your mental and physical energy levels must be tops at all times.
Business success requires that you get several things right. Don’t take anything for granted.
The link below has other issues you may also want to consider. Good luck!